Millions of euros from industrial relocations, the business that started in a garage
A wooden garage, an idea, a lot of work and a future-oriented vision – this is how the company of industrial relocation services, packaging and Export- Modpack Group was founded. In 11 years, the company’s customer number has reached almost 1,000. Its revenues were last year at 5.3 million euros, and the number of employees at 93. This year, the number of employees reached 130, and the revenue forecast aims at an increase of about 30%.
Valentin Mălăescu says that a single factory relocation project involves the work of about 50-60 people: from Project evaluators, people involved in logistics, those dealing with transport to places anywhere in Romania or in ports or airports, the work of the packaging team, which assembles the pieces into boxes. Then the loading and transport, on pre-established routes, to the factory’s relocation destination. This is where the subcontractors, respectively, those who unload the products come into the picture.
Modpack runs thousands of operations a year. Among Modpack customers, 90% are multinational companies.
Outside the headquarters, located in Ploiesti (Romania), the company uses a rented logistic space in Cluj where it serves customers in the center of the country; among the most recent investments is a 2 million euro for a logistics centre in Oradea. “We want to cover the western area of Europe and the exit towards Europe; It’ll probably be ready in the spring of next year. ”
However, the company also has facilities in the Czech Republic (Prague), United Kingdom (Liverpool) and it is going to open an office in the United States, as well. The total investments in the company and in the expansion go up to more than EUR 3 million.
The beginnings of Modpack Business
The business of Modpack Group began with the production of wooden packaging in a garage, subsequently evolving in the directions of multimodal transport and industrial relocations. Valentin Mălăescu says they borrowed a Western concept, one stop shop, through which for about 60% of their customers offer integrated services, from dismantling equipment, packaging, transport to another destination anywhere in the world – road, sea and air. The entrepreneur says it covers about any type of industry, having the capability to pack up and move any type of equipment. 90% of customers come from the oil industry, tobacco, food, automotive.
With an extensive experience in the field, Valentin Mălăescu made the first steps in the Modpack business:
“It was hard enough to take this step, in multinationals we earned pretty well during that period, but I was about 36 years old, I was tired of corporate work; And in a family company there are rules and it’s a lot of stress, but stress for us is generally generated by the client. ”
His brother, Bogdan Mălăescu, joined the business from the beginning. As an economist engineer, he focused on developing customer relations in the financial field. And even if he initially helped his brother only in his spare time, after two years he also devoted himself to the family business.
The company was founded by contracting a company in Bucharest dealing with equipment supplies as a customer, and the wooden packaging was developed along with the Timken bearing manufacturer from Ploiesti.
“From each customer we learned something and developed an area of activity; I started up with two customers in 2007, with a turnover in that period from somewhere at 20,000 euros a year, and the money that was invested at first was loaned from the bank” Valentin Mălăescu describes the beginnings of the business.
They bought a truck, some machines, started in very small halls – at one point their working space was the yard of an acquaintance from a commune in Ploiesti. From an initial working space of 50 square meters, the headquarters from Ploiesti was expanded nowadays to an area of 5,000 square meters.
One of the important steps was two years after the production of packaging began: they were contacted by a company in the Netherlands, one of their competitors in Utrecht, with the same activity field as theirs, which proposed a collaboration for an industrial relocation project. With only 10 employees (8 of them are still in the company), they accepted the project that they said was the one during which they learned to do industrial packaging in the place chosen by the customer – “There we actually learnt the profession”.
Currently, the business has divided into several profit centers, with the industrial relocation generating about 30% of the business. They had several large projects, relevant examples in this regard being the relocation services granted to tobbaco manufacturers or the dismantling and packaging of equipment in Africa, by plane, for a local beverage producer.
A few years ago, they took the first steps out of the country. They initially tried to open a place of business in Poland, but they have reoriented to the Czech Republic, where they currently have an office. “We thought it was in the centre of Europe and that it is close to Germany, that we can develop something in the area. And they’re stiffer, so even if we have offices there, we use them more for marketing purposes”
In January this year they continue their growth to Liverpool.
This year, they also announced their presence in the United States, which they have chosen in terms of the customers they already have “We went there because now 60-70% of customers are Americans.”
How the local industry evolves in the light of the moves made by Modpack System
From Valentin Mălăescu’s observations, it is plummeting. “There are many signals that factories working in Lohn, generally in automotive industry, begin to move to Morocco, to Africa, there are factories that work in Lohn in the textile industry that choose the Republic of Moldova or Macedonia, Serbia or move certain lines of manufacturing to other countries; If it works out for them, they’ll probably move away. ”
He believes that under the current wage pressures, in 5-10 years the Lohn industry in automotive and textiles will no longer be competitive enough. On the other hand, it observes the benefits of technology: “Industry develops in factories where technology, robots, smart production are used, I see investments coming, then I see that strong investments come from China, probably on a global level many foreign companies close their businesses in China, and begin to relocate towards Europe, Valentin Mălăescu said.